August 15, 2007


UK's Dairy Crest warns of milk price hike



One of UK's biggest dairy producers has warned that declining milk production is set to hike prices of the commodity in the coming months.


Mark Allen, chief executive of Dairy Crest, said wet summer was the main reason for the drop in milk production.


Allen said the adverse weather conditions had forced farmers to keep cattle indoors and feed them on silage normally kept back for winter. This, he said, had resulted in the milk yield falling and set prices to go up as much as 15 percent.


Allen indicated the costs would be passed on to the market.


British daily Financial Times said milk price rise was just one of a number of challenges facing Dairy Crest.


In May the company removed its Clover spread from market shelves after mould was found in one batch. Direct costs of the recall are reported to be in the region of GBP 3 million, but the group said overall trading remained on track.